SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT (the "Agreement") made as of this 24th day of July,
2017 by and between BNP PARIBAS ASSET MANAGEMENT USA, Inc., a New York
corporation with its principal place of business at 000 Xxxx Xxxxxx, 00(xx)
Xxxxx, Xxx Xxxx, XX 00000 (the "Adviser"), and BNP PARIBAS ASSET MANAGEMENT UK
Limited, a company organized under the laws of England & Wales with its
principal place of business at 0 Xxxxxxxxxxxx Xxxxxx, Xxxxxx XX0X0XX (the
"Sub-Adviser").
W I T N E S S E T H
WHEREAS, pursuant to authority granted to the Adviser by the Board of
Trustees (the "Board") of THE ADVISORS' INNER CIRCLE FUND III (the "Trust") on
behalf of the series set forth on Schedule A to this Agreement (the "Fund") and
pursuant to the provisions of the Investment Advisory Agreement dated as of
February 6, 2017 between the Adviser and the Fund (the "Management Agreement"),
the Adviser has selected the Sub-Adviser to act as sub-investment adviser of the
Fund and to provide certain related services, as more fully set forth below, and
to perform such services under the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Adviser and the Sub-Adviser do hereby agree as follows:
1. THE SUB-ADVISER'S SERVICES.
(a) DISCRETIONARY INVESTMENT MANAGEMENT SERVICES. The Sub-Adviser
shall act as sub-investment adviser with respect to the Fund. In such
capacity, the Sub-Adviser shall, subject to the supervision of the Adviser
and the Board, regularly provide the Fund with investment research, advice
and supervision and shall furnish continuously an investment program for
such Fund assets as may be allocated by the Adviser to the Sub-Adviser (the
"Assets"), consistent with the investment objectives and policies of the
Fund. The Sub-Adviser shall determine, from time to time, what investments
shall be purchased for the Fund and what such securities shall be held or
sold by the Fund, what derivatives positions the Fund shall enter into, and
what portion of the Fund's assets shall be held uninvested in cash, subject
always to the provisions of the Trust's Agreement and Declaration of Trust,
By-Laws and its registration statement on Form N-1A (the "Registration
Statement") under the Investment Company Act of 1940, as amended (the "1940
Act"), and under the Securities Act of 1933, as amended (the "1933 Act"),
relating to the Fund, as filed with the Securities and Exchange Commission
(the "Commission"), and to the investment objectives, policies and
restrictions of the Fund, as each of the same shall be from time to time in
effect. To carry out such obligations, the Sub-Adviser shall exercise full
discretion and act for the Fund in the same manner and with the same force
and effect as the Fund itself might or could do with respect to purchases,
sales or other transactions, including but not limited to choosing banks,
brokers, futures commission merchants and other counterparties, executing
agreements and other documents as the Fund's agent, as well as all other
such things necessary or incidental to the furtherance or conduct of such
purchases, sales or other transactions. Notwithstanding
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the foregoing, the Sub-Adviser shall, upon written instructions from the
Adviser, effect such portfolio transactions for the Fund as the Adviser may
from time to time direct; provided however, that the Sub-Adviser shall not
be responsible for any such portfolio transactions effected upon written
instructions from the Adviser. No reference in this Agreement to the
Sub-Adviser having full discretionary authority over the Fund's investments
shall in any way limit the right of the Adviser, in its sole discretion, to
establish or revise policies in connection with the management of the
Fund's assets or to otherwise exercise its right to control the overall
management of the Fund's assets. Without limiting the generality of the
foregoing, the Adviser has the authority to adhere on the Fund's behalf to
the applicable International Swaps and Derivatives Association ("ISDA")
over-the-counter ("OTC") derivatives transaction protocols and enter into
client agency agreements or other documents that may be required to effect
OTC derivatives transaction through swap execution facilities (i.e. SEFs).
In connection with Xxxx-Xxxxx Xxxx Street Reform and Consumer
Protection Act ("XXXX-XXXXX") AND European Market Infrastructure Regulation
("EMIR") compliance and compliance with any other laws or regulations
adopted by a jurisdiction in which the Sub-Adviser may operate on behalf of
the Fund, pursuant to the Management Agreement, the Sub-Adviser, as an
affiliate of the Adviser, is authorized to provide and disclose information
concerning the Fund as required by law or regulation for the purposes of
satisfying applicable transaction and other reporting requirements related
to Xxxx-Xxxxx, XXXX and such other laws or regulations. Pursuant to the
Management Agreement, the Fund represents and warrants that it will obtain
a Global Markets Entity Identifier ("GMEI") or Legal Entity Identifier
("LEI") and provide it to the Adviser or has requested and authorized the
Adviser to obtain a GMEI or LEI on its behalf.
(b) COMPLIANCE. The Sub-Adviser agrees to comply with the requirements
of the 1940 Act, the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), the 1933 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), the Commodity Exchange Act and the respective
rules and regulations thereunder, as applicable, as well as with all other
applicable federal and state laws, rules, regulations and case law that
relate to the services and relationships described hereunder and to the
conduct of its business as a registered investment adviser. The Sub-Adviser
also agrees to comply with the objectives, policies and restrictions set
forth in the Registration Statement, as amended or supplemented, of the
Fund, and with any policies, guidelines, instructions and procedures
approved by the Board or the Adviser and provided to the Sub-Adviser with
reasonable notice prior to implementation. In selecting the Fund's
portfolio securities and other investment and performing the Sub-Adviser's
obligations hereunder, the Sub-Adviser shall cause the Fund to comply with
the diversification and source of income requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended or successor legislation (the
"Code"), for qualification as a regulated investment company. The
Sub-Adviser shall maintain compliance procedures that it reasonably
believes are adequate to ensure the compliance with the foregoing. No
supervisory activity undertaken by the Adviser shall limit the
Sub-Adviser's full responsibility for any of the foregoing.
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(c) PROXY VOTING. Pursuant to Board authority, the Adviser has the
authority to determine how proxies with respect to securities that are held
by the Fund shall be voted, and the Adviser may delegate the authority and
responsibility to vote proxies for the Fund's securities to the
Sub-Adviser. So long as proxy voting authority for the Fund has been
delegated to the Sub-Adviser, the Adviser shall provide such assistance to
the Sub-Adviser with respect to the voting of proxies for the Fund as the
Sub-Adviser may from time to time reasonably request, and the Adviser shall
promptly forward to the Sub-Adviser any information or documents necessary
for the Sub-Adviser to exercise its proxy voting responsibilities. The
Sub-Adviser shall carry out such responsibility in accordance with any
instructions that the Board or the Adviser shall provide from time to time,
and at all times in a manner consistent with Rule 206(4)-6 under the
Advisers Act or any successor rule and its fiduciary responsibilities to
the Trust. The Sub-Adviser shall provide periodic reports and keep such
records relating to proxy voting as the Board may reasonably request or as
may be necessary for the Fund to comply with the 1940 Act and other
applicable law. Any such delegation of proxy voting responsibility to the
Sub-Adviser may be revoked or modified by the Board or the Adviser at any
time.
The Sub-Adviser is authorized to instruct the Fund's custodian and/or
broker(s) to forward promptly to the Sub-Adviser, or the Fund's designated
service provider, copies of all proxies and shareholder communications
relating to securities held in the portfolio of a Fund (other than
materials relating to legal proceedings against the Fund). The Sub-Adviser
may also instruct the Fund's custodian and/or broker(s) to provide reports
of holdings in the portfolio of the Fund. The Sub-Adviser has the authority
to engage a service provider on behalf of the Fund and at the Fund's
expense to assist with administrative functions related to voting Fund
proxies. The Trust shall direct the Fund's custodian and/or broker(s) to
provide any assistance requested by the Sub-Adviser in facilitating the use
of a service provider. In no event shall the Sub-Adviser have any
responsibility to vote proxies that are not received on a timely basis. The
Trust acknowledges that the Sub-Adviser, consistent with the Sub-Adviser's
written proxy voting policies and procedures, may refrain from voting a
proxy if, in the Sub-Adviser's discretion, refraining from voting would be
in the best interests of the Fund and its shareholders.
(d) RECORDKEEPING. The Sub-Adviser shall not be responsible for the
provision of administrative, bookkeeping or accounting services to the
Fund, except as otherwise provided herein or as may be necessary for the
Sub-Adviser to supply to the Adviser, the Trust or its Board the
information required to be supplied under this Agreement.
The Sub-Adviser shall maintain separate books and detailed records of
all matters pertaining to the Fund's assets advised by the Sub-Adviser
required by Rule 31a-1 under the 1940 Act (other than those records being
maintained by the Adviser, or any administrator custodian or transfer agent
appointed by the Fund) relating to its responsibilities provided hereunder
with respect to the Fund, and shall preserve such records for the periods
and in a manner prescribed therefore by Rule 31a-2 under the 1940 Act (the
"Fund Books and Records"). The Fund Books and Records shall be
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available to the Adviser and the Board at any time upon reasonable request
shall be delivered to the Trust upon the termination of this Agreement and
shall be available without delay during any day the Trust is open for
business; provided that the Sub-Adviser may make and retain copies of any
such records prior to providing them to the Board of the Trust.
(e) HOLDINGS INFORMATION AND PRICING. The Sub-Adviser shall provide
regular reports regarding the Fund's holdings as reasonably requested by
the Fund, and may, on its own initiative, furnish the Adviser, the Trust
and its Board from time to time with whatever information the Sub-Adviser
believes is appropriate for this purpose. The Sub-Adviser agrees to notify
the Adviser and the Board promptly if the Sub-Adviser reasonably believes
that the value of any security held by a Fund, as set forth in books and
records provided by the Fund to the Sub-Adviser, may not reflect fair
value. The Sub-Adviser agrees to provide upon request any pricing
information of which the Sub-Adviser is aware to the Adviser, Trust, its
Board and/or any Fund pricing agent to assist in the determination of the
fair value of any Fund holdings for which market quotations are not readily
available or as otherwise required in accordance with the 1940 Act or the
Fund valuation procedures for the purpose of calculating the Trust's net
asset value in accordance with procedures and methods established by the
Board.
(f) COOPERATION WITH AGENTS OF THE ADVISER AND THE TRUST. The
Sub-Adviser agrees to cooperate with and provide reasonable assistance to
the Adviser, the Trust and any Trust custodian or foreign sub-custodians,
any Trust pricing agents and all other agents and representatives of the
Adviser and the Trust with respect to such information regarding the Fund
as such entities may reasonably request from time to time in the
performance of their obligations, provide prompt responses to reasonable
requests made by such persons and establish appropriate interfaces with
each so as to promote the efficient exchange of information and compliance
with applicable laws and regulations.
(g) CONSULTATION WITH OTHER SUB-ADVISERS. In performance of its duties
and obligations under this Agreement, the Sub-Adviser shall not consult
with any other sub-adviser to the Fund or a sub-adviser to a portfolio that
is under common control with the Fund concerning transactions for the Fund,
except as permitted by the policies and procedures of the Fund. The
Sub-Adviser shall not provide investment advice to any assets of the Fund
other than the assets managed by the Sub-Adviser.
2. CODE OF ETHICS. The Sub-Adviser has adopted a written code of ethics
that it reasonably believes complies with the requirements of Rule 17j-1 under
the 1940 Act, which it has provided to the Adviser and the Trust. The
Sub-Adviser shall implement procedures reasonably designed to ensure that its
Access Persons (as defined in the Sub-Adviser's Code of Ethics) comply in all
material respects with the Sub-Adviser's Code of Ethics, as in effect from time
to time. Upon request, the Sub-Adviser shall provide the Trust with (i) a copy
of the Sub-Adviser's current Code of Ethics, as in effect from time to time, and
(ii) a certification that it has adopted procedures reasonably necessary to
prevent Access Persons from engaging in any conduct prohibited by the
Sub-Adviser's Code of Ethics. Annually, the Sub-Adviser shall furnish a written
report, which complies with the requirements of Rule 17j-1, concerning the Sub-
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Adviser's Code of Ethics to the Adviser and the Trust's Board. The Sub-Adviser
shall respond to requests for information from the Adviser and the Trust as to
violations of the Code by Access Persons and the sanctions imposed by the
Sub-Adviser. The Sub-Adviser shall notify the Adviser and the Trust as soon as
reasonably practicable of any material violation of the Code, whether or not
such violation relates to a security held by any Fund.
3. INFORMATION AND REPORTING. The Sub-Adviser shall provide the Adviser,
the Trust, and their respective officers with such periodic reports concerning
the obligations the Sub-Adviser has assumed under this Agreement as the Adviser
and the Trust may from time to time reasonably request.
(a) NOTIFICATION OF BREACH / COMPLIANCE REPORTS. The Sub-Adviser shall
notify the Trust's Chief Compliance Officer and Adviser as soon as
reasonably practicable upon detection of (i) any material failure to manage
the Fund in accordance with its investment objectives and policies or any
applicable law; or (ii) any material breach of the Fund's or the Adviser's
policies, guidelines or procedures. In addition, the Sub-Adviser shall
provide a quarterly report regarding the Fund's compliance with its
investment objectives and policies, applicable law, including, but not
limited to the 1940 Act and Subchapter M of the Code, and the Fund's and
the Adviser's policies, guidelines or procedures as applicable to the
Sub-Adviser's obligations under this Agreement. The Sub-Adviser
acknowledges and agrees that the Adviser may, in its discretion, provide
such quarterly compliance certifications to the Board. The Sub-Adviser
agrees to use best efforts to correct any such failure promptly and to take
any action that the Board and/or the Adviser may reasonably request in
connection with any such breach applicable to the Sub-Adviser's obligations
under this Agreement. Upon request, the Sub-Adviser shall also provide the
officers of the Trust with supporting certifications in connection with
such certifications of Fund financial statements and disclosure controls
pursuant to the Xxxxxxxx-Xxxxx Act. The Sub-Adviser will promptly notify
the Trust in the event (i) the Sub-Adviser is served or otherwise receives
notice of any action, suit, proceeding, inquiry or investigation, at law or
in equity, before or by any court, public board, or body, involving the
affairs of the Trust (excluding class action suits in which a Fund is a
member of the plaintiff class by reason of the Fund's ownership of shares
in the defendant) or the compliance by the Sub-Adviser with the federal or
state securities laws or (ii) an actual change in control of the
Sub-Adviser resulting in an "assignment" (as defined in the 1940 Act) has
occurred or is otherwise reasonably expected to occur.
(b) INSPECTION. Upon reasonable request, the Sub-Adviser agrees to
make its records and premises (including the availability of the
Sub-Adviser's employees for interviews) to the extent that they relate to
the conduct of services provided to the Fund or the Sub-Adviser's conduct
of its business as an investment adviser reasonably available for
compliance audits by the Adviser or the Trust's officers, employees,
accountants or counsel; in this regard, the Trust and the Adviser
acknowledge that the Sub-Adviser shall have no obligation to make available
proprietary information unrelated to the services provided to the Fund or
any information related to other clients of the Sub-Adviser, except to the
extent necessary for the Adviser to confirm the absence of any conflict of
interest and compliance with any laws, rules or regulations in the
management
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of the Fund. For the avoidance of doubt, the Sub-Adviser shall not be
obligated to provide information to the Adviser or the Trust's officers,
employees, accountants or counsel, to the extent such information
exclusively relates to another client of the Sub-Adviser.
(c) BOARD AND FILINGS INFORMATION. The Sub-Adviser will also provide
the Adviser and Trust with any information reasonably requested regarding
its management of the Fund required for any meeting of the Board, or for
any shareholder report, Form N-CSR, Form N-Q, Form N-PX, Form N-SAR,
amended registration statement, proxy statement, or prospectus supplement
to be filed by the Trust with the Commission and the Adviser shall provide
drafts of such filings for the Sub-Adviser's review with reasonable time
prior to making any such filings referring to the Fund. The Sub-Adviser
will make its officers and employees available to meet with the Board from
time to time on due notice to review its investment management services to
the Fund in light of current and prospective economic and market conditions
and shall furnish to the Board such information as may reasonably be
necessary in order for the Board to evaluate this Agreement or any proposed
amendments thereto.
(d) TRANSACTION INFORMATION. The Sub-Adviser shall furnish to the
Adviser and the Trust such information concerning portfolio transactions as
may be necessary to enable the Adviser, Trust or their designated agents to
perform such compliance testing on the Fund and the Sub-Adviser's services
as the Adviser and the Trust may, in their sole discretion, determine to be
appropriate. The provision of such information by the Sub-Adviser to the
Adviser, Trust or their designated agents in no way relieves the
Sub-Adviser of its own responsibilities under this Agreement.
4. BROKERAGE.
(a) PRINCIPAL TRANSACTIONS. In connection with purchases or sales of
securities for the account of a Fund, neither the Sub-Adviser nor any of
its directors, officers or employees will act as a principal or agent or
receive any commission except as permitted by the 1940 Act.
(b) PLACEMENT OF ORDERS. The Sub-Adviser shall arrange for the placing
of all orders for the purchase and sale of securities for a Fund's account
with brokers or dealers selected by the Sub-Adviser. In the selection of
such brokers or dealers and the placing of such orders, the Sub-Adviser is
directed at all times to seek for a Fund the most favorable execution and
net price available under the circumstances. It is also understood that it
is desirable for the Fund that the Sub-Adviser have access to brokerage and
research services provided by brokers who may execute brokerage
transactions at a higher cost to the Fund than may result when allocating
brokerage to other brokers, consistent with section 28(e) of the 1934 Act
and any Commission or Commission staff interpretations thereof. Therefore,
the Sub-Adviser is authorized to place orders for the purchase and sale of
securities for the Fund with such brokers, subject to review by the Adviser
and the Board from time to time with respect to the extent and continuation
of this practice. It is understood that the services provided by such
brokers may be useful to
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the Sub-Adviser in connection with its or its affiliates' services to other
clients. For the avoidance of doubt, this Section 4(b) shall at all times
be subject to the Sub-Adviser's policies and procedures relating to
placement of orders, provided that all such policies are in compliance with
the Investment Company Act of 1940.
(c) AGGREGATED TRANSACTIONS. When the Sub-Adviser deems the purchase
or sale of a security or futures contract or options thereon to be in the
best interest of a Fund as well as other clients of the Sub-Adviser, the
Sub-Adviser may, to the extent permitted by applicable law and regulations,
aggregate the order for securities or futures contracts or options thereon
to be sold or purchased. In such event, the Sub-Adviser will allocate
securities or futures contracts or options thereon so purchased or sold, as
well as the expenses incurred in the transaction, in the manner the
Sub-Adviser reasonably considers to be equitable and consistent with its
fiduciary obligations to a Fund and to such other clients under the
circumstances. The parties hereto recognise that each individual aggregated
transaction may operate to the advantage or disadvantage of the Fund.
(d) AFFILIATED BROKERS. The Sub-Adviser or any of its affiliates may
act as broker in connection with the purchase or sale of securities or
other investments for a Fund, subject to: (a) the requirement that the
Sub-Adviser seek to obtain best execution and price within the policy
guidelines determined by the Board and set forth in a Fund's current
Registration Statement; (b) the provisions of the 1940 Act; (c) the
provisions of the Advisers Act; (d) the provisions of the 1934 Act; and (e)
other provisions of applicable law. These brokerage services are not within
the scope of the duties of the Sub-Adviser under this Agreement. Subject to
the requirements of applicable law and any procedures adopted by the Board,
the Sub-Adviser or its affiliates may receive brokerage commissions, fees
or other remuneration from a Fund for these services in addition to the
Sub-Adviser's fees for services under this Agreement.
(e) CONTRACTING AUTHORITY. The Adviser is hereby given the authority
to negotiate and enter into binding agreements and contracts in the name of
the Fund and on its behalf (including, but not limited to, brokerage
agreements, ISDA master agreements and schedules thereto, futures
agreements, clearing agreements, Master Securities Forward Transaction
Agreements, other master agreements, other transaction agreements,
investment transactions, confirmations of investment transactions, OTC
derivatives agreements, and related documents for investment transactions
and modifications thereto), and make representations (including
representations regarding the purchase of securities or other assets for
investment) in the Fund's name and on its behalf that the Adviser deems
appropriate to carry out its duties and services hereunder.
5. CUSTODY. Nothing in this Agreement shall permit the Sub-Adviser to take
or receive physical possession of cash, securities or other investments of a
Fund.
6. ALLOCATION OF CHARGES AND EXPENSES. The Sub-Adviser will bear its own
costs of providing services hereunder. Other than as herein specifically
indicated, the Sub-Adviser shall not be responsible for a Fund's or the
Adviser's expenses, including brokerage and other
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expenses incurred in placing orders for the purchase and sale of securities and
other investment instruments.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) PROPERLY REGISTERED. The Sub-Adviser is registered as an
investment adviser under the Advisers Act, and will remain so registered
for the duration of this Agreement. The Sub-Adviser is not prohibited by
the Advisers Act or the 1940 Act from performing the services contemplated
by this Agreement, and to the best knowledge of the Sub-Adviser, there is
no proceeding or investigation that is reasonably likely to result in the
Sub-Adviser being prohibited from performing the services contemplated by
this Agreement. The Sub-Adviser agrees to promptly notify the Trust of the
occurrence of any event that would disqualify the Sub-Adviser from serving
as an investment adviser to an investment company. The Sub-Adviser is in
compliance in all material respects with all applicable federal and state
law in connection with its investment management operations.
(b) ADV DISCLOSURE. The Sub-Adviser has provided the Trust with a copy
of Part I of its Form ADV as most recently filed with the Commission and
its Part II as most recently updated and will, promptly after filing any
amendment to its Form ADV with the Commission or updating its Part II,
furnish a copy of such amendments or updates to the Trust. The information
contained in the Adviser's Form ADV is accurate and complete in all
material respects and does not omit to state any material fact necessary in
order to make the statements made, in light of the circumstances under
which they were made, not misleading. The Trust agrees that the Sub-Adviser
may provide its Form ADV in electronic form.
(c) FUND DISCLOSURE DOCUMENTS. The Sub-Adviser has reviewed and the
Adviser and Sub-Adviser will be provided with and review, the Registration
Statement, summary prospectus, prospectus, statement of additional
information, periodic reports to shareholders, reports and schedules filed
with the Commission (including any amendment, supplement or sticker to any
of the foregoing) and advertising and sales material relating to the Fund
(collectively the "Disclosure Documents") and Sub-Adviser represents and
warrants that, with respect to language provided by Sub-Adviser, such
Disclosure Documents contain or will contain no untrue statement of any
material fact and do not and will not omit any statement of material fact
required to be stated therein or necessary to make the statements therein
not misleading.
(d) USE OF THE NAMES "BNP PARIBAS" OR "BNP PARIBAS ASSET MANAGEMENT
USA, INC." The Sub-Adviser has the right to use the names "BNP Paribas" and
"BNP PARIBAS ASSET MANAGEMENT USA, Inc." in connection with its services to
the Trust. The Sub-Adviser is not aware of any threatened or existing
actions, claims, litigation or proceedings that would adversely affect or
prejudice the rights of the Sub-Adviser or the Trust to use the names "BNP
Paribas" or "BNP PARIBAS ASSET MANAGEMENT USA, Inc."
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(e) INSURANCE. The Sub-Adviser maintains errors and omissions
insurance coverage in an appropriate amount and shall provide prior written
notice to the Trust (i) of any material adverse changes in its insurance
policies or insurance coverage; or (ii) if any material claims are made on
its insurance policies that could reasonably be expected to have a material
adverse effect on the coverage related to its management of the Fund.
Furthermore, the Sub-Adviser shall, upon reasonable request, provide the
Trust with any information it may reasonably require concerning the amount
of or scope of such insurance.
(f) NO DETRIMENTAL AGREEMENT. The Sub-Adviser represents and warrants
that it has no arrangement or understanding with any party, other than the
Trust, that would influence the decision of the Sub-Adviser with respect to
its selection of securities for a Fund, and that all selections shall be
done in accordance with what is in the best interest of the Fund.
(g) CONFLICTS. The Sub-Adviser shall act honestly, in good faith and
in the best interests of the Trust including requiring any of its personnel
with knowledge of Fund activities to place the interests of the Fund first,
ahead of their own interests, in all personal trading scenarios that may
involve a conflict of interest with the Fund, consistent with its fiduciary
duties under applicable law. For the avoidance of doubt, this Section 7(g)
shall at all times be subject to the Sub-Adviser's policies and procedures
relating to conflicts, provided that such policies in procedures are in
compliance with the Investment Company Act of 1940.
(h) REPRESENTATIONS. The representations and warranties in this
Section 7 shall be deemed to be made on the date this Agreement is executed
and at the time of delivery of the quarterly compliance report required by
Section 3(a), whether or not specifically referenced in such report.
8. THE NAME "BNP PARIBAS" THE NAME "BNP PARIBAS". The Adviser grants to the
Trust a license to use the names "BNP Paribas"" (the "Name") as part of the name
of the Fund. The foregoing authorization by the Adviser to the Trust to use the
Name as part of the name of the Fund is not exclusive of the right of the
Adviser itself to use, or to authorize others to use, the Name; the Trust
acknowledges and agrees that, as between the Trust and the Adviser, the Adviser
has the right to use, or authorize others to use, the Name. The Trust shall (1)
only use the Name in a manner consistent with uses approved by the Adviser; (2)
use its best efforts to maintain the quality of the services offered using the
Name; (3) adhere to such other specific quality control standards as the Adviser
may from time to time promulgate; and (4) protect the reputation and goodwill of
the Name. The Trust acknowledges that the Name and the trademark associated
therewith are the valuable property of the Adviser or its affiliates. The Trust
will (a) submit to the Adviser for review and preapproval prior to use any
promotional materials using the Name; and (b) change the name of the Fund within
one month of its receipt of the Adviser's request, or such other shorter time
period as may be required under the terms of a settlement agreement or court
order, so as to eliminate all reference to the Name and will not thereafter
transact any business using the Name in the name of the Fund; provided, however,
that to the extent required by law, the Trust may continue to use beyond such
date any supplies of
9
prospectuses, marketing materials and similar documents that the Trust had on
the date of such name change in quantities not exceeding those historically
produced and used in connection with such Fund.
9. SUB-ADVISER'S COMPENSATION. The Adviser shall pay to the Sub-Adviser, as
compensation for the Sub-Adviser's services hereunder, a fee, determined as
described in Schedule A that is attached hereto and made a part hereof. Such fee
shall be computed daily and paid not less than monthly in arrears by the
Adviser. The Fund shall have no responsibility for any fee payable to the
Sub-Adviser.
The Sub-Adviser will be compensated based on the portion of Fund assets
allocated to the Sub-Adviser by the Adviser. The method for determining net
assets of a Fund for purposes hereof shall be the same as the method for
determining net assets for purposes of establishing the offering and redemption
prices of Fund shares as described in the Fund's prospectus. In the event of
termination of this Agreement, the fee provided in this Section shall be
computed on the basis of the period ending on the last business day on which
this Agreement is in effect subject to a pro rata adjustment based on the number
of days elapsed in the current month as a percentage of the total number of days
in such month.
10. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder, the
Sub-Adviser is and shall be an independent contractor and, unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Fund, the Trust or the Adviser in any way
or otherwise be deemed to be an agent of the Fund, the Trust or the Adviser. If
any occasion should arise in which the Sub-Adviser gives any advice to its
clients concerning the shares of a Fund, the Sub-Adviser will act solely as
investment counsel for such clients and not in any way on behalf of the Fund.
11. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically
terminate, without the payment of any penalty, (i) in the event of its
assignment (as defined in section 2(a)(4) of the 0000 Xxx) or (ii) in the event
of the termination of the Management Agreement; provided that such termination
shall not relieve the Adviser or the Sub-Adviser of any liability incurred
hereunder.
This Agreement may not be added to or changed orally and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
12. DURATION AND TERMINATION.
This Agreement shall become effective as of the date executed and shall
remain in full force and effect continually thereafter, subject to renewal as
provided in Section 12(c) and unless terminated automatically as set forth in
Section 11 hereof or until terminated as follows:
(a) The Trust may cause this Agreement to terminate either (i) by vote
of its Board or (ii) with respect to the Fund, upon the affirmative vote of
a majority of the outstanding voting securities of the Fund, in each case
upon at least 15 day's written notice to the Sub-Adviser; or
10
(b) The Adviser may at any time terminate this Agreement by not more
than sixty (60) days' nor less than thirty (30) days' written notice
delivered or mailed by registered mail, postage prepaid, to the
Sub-Adviser; or
(c) The Sub-Adviser may at any time terminate this Agreement by not
more than sixty (60) days' nor less than thirty (30) days' written notice
delivered or mailed by registered mail, postage prepaid, to the Adviser; or
(d) This Agreement shall automatically terminate two years from the
date of its execution unless its renewal is specifically approved at least
annually thereafter by (i) a majority vote of the Trustees, including a
majority vote of such Trustees who are not interested persons of the Trust,
the Adviser or the Sub-Adviser, at a meeting called for the purpose of
voting on such approval; or (ii) the vote of a majority of the outstanding
voting securities of the Fund; provided, however, that if the continuance
of this Agreement is submitted to the shareholders of the Fund for their
approval and such shareholders fail to approve such continuance of this
Agreement as provided herein, the Sub-Adviser may continue to serve
hereunder as to the Fund in a manner consistent with the 1940 Act and the
rules and regulations thereunder; and
(e) Termination of this Agreement pursuant to this Section shall be
without payment of any penalty.
In the event of termination of this Agreement for any reason, the
Sub-Adviser shall, immediately upon notice of termination or on such later
date as may be specified in such notice, cease all activity on behalf of
the Fund and with respect to any of its assets, except as expressly
directed by the Adviser or as otherwise required by any fiduciary duties of
the Sub-Adviser under applicable law. In addition, the Sub-Adviser shall
deliver the Fund's Books and Records to the Adviser by such means and in
accordance with such schedule as the Adviser shall direct (and may retain a
copy of such books and records) and shall otherwise cooperate, as
reasonably directed by the Adviser, in the transition of portfolio asset
management to any successor of the Sub-Adviser, including the Adviser.
13. CERTAIN DEFINITIONS. FOR THE PURPOSES OF THIS AGREEMENT:
(a) "Affirmative vote of a majority of the outstanding voting
securities of the Fund" shall have the meaning as set forth in the 1940
Act, subject, however, to such exemptions as may be granted by the
Commission under the 1940 Act or any interpretations of the Commission
staff.
(b) "Interested persons" and "Assignment" shall have their respective
meanings as set forth in the 1940 Act, subject, however, to such exemptions
as may be granted by the Commission under the 1940 Act or any
interpretations of the Commission staff.
14. LIABILITY OF THE SUB-ADVISER.
(a) The Sub-Adviser shall have responsibility for the accuracy and
11
completeness (and liability for the lack thereof) of statements that are
included in the Fund's Disclosure Documents relating to the Sub-Adviser and
its affiliates, the Fund's investment strategies and related risks and
other information supplied by the Sub-Adviser for inclusion therein. The
Sub-Adviser shall not be deemed by virtue of this Agreement to have made
any representation or warranty that any level of investment performance or
level of investment results will be achieved or that Sub-Adviser's overall
management of the Fund will be successful. The Adviser understands that
investment decisions made for the Fund by the Sub-Adviser are subject to
various market, currency, economic, political and business risks, and that
those investment decisions will not always be profitable.
(b) The Sub-Adviser shall be liable to the Fund for any loss
(including transaction costs) incurred by the Fund as a result of any
investment made by the Sub-Adviser in contravention of: (i) any investment
policy, guideline or restriction set forth in the Registration Statement or
as approved by the Board from time to time and provided to the Sub-Adviser;
or (ii) applicable law, including but not limited to the 1940 Act and the
Code (including but not limited to the Fund's failure to satisfy the
diversification or source of income requirements of Subchapter M of the
Code) (the investments described in this subsection (b) collectively are
referred to as "Improper Investments"); provided, however, that the
Sub-Adviser shall not be liable for: (i) any Improper Investment made in
good faith reliance upon the written advice of outside counsel to the Fund;
or (ii) losses resulting from circumstances outside the Sub-Adviser's
control such as changes in price or value of assets as a result of market
movement or rating downgrade.
(c) The Sub-Adviser shall indemnify and hold harmless the Adviser
against any and all losses, claims, damages, expenses or liabilities
(including the reasonable cost of investigating and defending any alleged
loss, claim, damage, expense or liability and reasonable counsel fees
incurred in connection therewith) to which the Adviser may become subject
under the 1933 Act, the 1934 Act, the 1940 Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages, expenses or liabilities (or actions in respect
thereof) arise out of or are based upon: (i) a material breach by the
Sub-Adviser of this Agreement or of the representations and warranties made
by the Sub-Adviser herein; (ii) any Improper Investment to the extent not
made in good faith reliance on the written advice of counsel to the Fund;
(iii) any untrue statement of a material fact contained in any Disclosure
Document and supplied by the Sub-Adviser or the omission from a Disclosure
Document of a material fact relating to the Sub-Adviser and its affiliates,
the Fund's investment strategies and related risks and other information
supplied by the Sub-Adviser for inclusion in such Disclosure Document that
is required to be stated therein or necessary to make the statements
therein not misleading; or (iv) the Sub-Adviser's negligent performance or
non-performance of its duties hereunder; provided, however, that nothing
herein shall be deemed to protect the Adviser against any liability to
which the Adviser would otherwise be subject by reason of willful
misfeasance, bad faith, negligence or reckless disregard of the duties
involved in its conduct.
(d) Pursuant to the Management Agreement, the Adviser shall indemnify
and hold harmless the Trust, each affiliated person of the Trust within the
meaning of Section
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2(a)(3) of the 1940 Act, and each person who controls the Trust within the
meaning of Section 15 of the 1933 Act (any such person, an "Indemnified
Party") against any and all losses, claims, damages, expenses or
liabilities (including the reasonable cost of investigating and defending
any alleged loss, claim, damage, expense or liability and reasonable
counsel fees incurred in connection therewith) to which any such person may
become subject under the 1933 Act, the 1934 Act, the 1940 Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages, expenses or liabilities (or
actions in respect thereof) arise out of or are based upon: (i) a material
breach by the Adviser or its affiliates of this Agreement or of the
representations and warranties made by the Sub-Adviser or its affiliates
herein; (ii) any Improper Investment to the extent not made in good faith
reliance on the written advice of counsel to the Fund; (iii) any untrue
statement of a material fact contained in any Disclosure Document and
supplied by the Adviser or its affiliates or the omission from a Disclosure
Document of a material fact relating to the Adviser or its affiliates, the
Fund's investment strategies and related risks and other information
supplied by the Adviser or its affiliates for inclusion in such Disclosure
Document that is required to be stated therein or necessary to make the
statements therein not misleading; or (iv) the Adviser's or its affiliates'
negligent performance or non-performance of their respective duties
hereunder; provided, however, that nothing herein shall be deemed to
protect any Indemnified Party who is a Trustee or officer of the Trust
against any liability to the Trust or to its shareholders to which such
Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, negligence or reckless disregard of the duties
involved in the conduct of such person's office with the Trust.
15. ENFORCEABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
16. LIMITATION OF LIABILITY. The parties to this Agreement acknowledge and
agree that all litigation arising hereunder, whether direct or indirect, and of
any and every nature whatsoever shall be satisfied solely out of the assets of
the affected Fund and that no Trustee, officer or holder of shares of beneficial
interest of the Fund shall be personally liable for any of the foregoing
liabilities.
17. CHANGE IN THE ADVISER'S OWNERSHIP. The Sub-Adviser agrees that it shall
notify the Trust of any anticipated or otherwise reasonably foreseeable change
in the ownership of the Sub-Adviser within a reasonable time prior to such
change being effected.
18. DATA PROTECTION.
(a) In the performance this Agreement, each party hereto (for the
purposes of this Clause 18, the "Receiving Party") may collect personal
data regarding natural persons employed by the other party and so will act
as data controller (and in certain
13
circumstances, data processor) within the meaning of the applicable laws
regarding data protection, if any. The other party (for the purposes of
this Clause 18, the "Disclosing Party") hereby consents to the processing
and use by the Receiving Party and its (or their) agents and affiliates of
personal data (as defined in the applicable laws regarding data protection,
if any) received under this Agreement, which may include the transfer of
such data out of the European Economic Area. Such data may also be used by
the Receiving Party and its (or their) agents and affiliates to manage the
relationship between the parties, to make calculations and payments, to
make risk evaluations, for security purposes or the fight against money
laundering and terrorist financing, to update its records, to comply with
legal and regulatory requirements and to advise the Disclosing Party of
other products and services, unless has been instructed otherwise. A party
providing personal data undertakes to supply it in accordance with the
provisions of the applicable laws regarding data protection, if any.
Personal data may include names, professional e-mail addresses,
professional telephone numbers and specimen signatures.
(b) Each party will take appropriate technical and organisational
security measures and procure that it and any of its sub-contractors shall
take such measures, against unauthorised or unlawful processing of personal
data and against accidental loss or destruction of, or damage to, such
personal data supplied to it under this Agreement in accordance with all
applicable laws regarding data protection.
19. TRACK RECORD. Further, for the avoidance of doubt, the Sub-Adviser
shall be entitled to retain a copy and use records of each of its transactions
and other records pertaining to the Fund as are necessary to support any such
uses of the investment performance and track record.
20. JURISDICTION. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Delaware and the
Sub-Adviser consents to the jurisdiction of courts, both state and federal, in
Delaware, with respect to any dispute under this Agreement.
21. PARAGRAPH HEADINGS. The headings of paragraphs contained in this
Agreement are provided for convenience only, form no part of this Agreement and
shall not affect its construction.
22. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
on their behalf by their duly authorized officers as of the date first above
written.
BNP PARIBAS ASSET MANAGEMENT USA, INC.
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Legal & Compliance Officer
BNP PARIBAS ASSET MANAGEMENT UK LIMITED
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxx
Title: UK CFO
By: /s/ Xxxx Xxxxx
-----------------------------------
Name: Xxxx Xxxxx
Title: Deputy UK CFO
15
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
DATED JULY 24, 2017 BETWEEN
BNP PARIBAS ASSET MANAGEMENT USA, INC.
AND
BNP PARIBAS ASSET MANAGEMENT UK LIMITED
The Adviser will pay to the Sub-Adviser as compensation for the Sub-Adviser's
services rendered, a fee, computed daily at an annual rate based on the average
daily net assets of the respective Fund as may be allocated by the Adviser to
the Sub-Adviser from time to time under the following fee schedule:
FUND RATE
--------------------------------------------------------------------------------
BNP Paribas AM Emerging Market Total Return Fixed Income Fund 0.36%
16
